Bloomberg Business of Sports — Episode Summary
Episode: KKR To Buy Sports Investor Arctos; Robinhood's Prediction Markets
Date: January 9, 2026
Hosts: Michael Barr, Vanessa Perdomo, Damian Sassauer
Guests: Alison McNeely (Bloomberg News Private Equity Reporter), J.B. McKenzie (VP & GM of Futures and International, Robinhood Markets), Ira Budway (Bloomberg Sports Reporter)
Episode Overview
This episode dives into two major stories at the intersection of sports, business, and finance:
- KKR's Acquisition of Arctos Partners: Exploring the implications of private equity giant KKR moving decisively into sports ownership and asset management.
- Robinhood's Expansion into Prediction Markets: A discussion with Robinhood's JB McKenzie about their push into prediction markets—how they differ from traditional sports betting, and the regulatory/technological forces shaping this emerging trend.
The show concludes with a roundtable of sports business predictions for 2026, including deep dives into private equity’s influence in college sports, women’s sports economics, and the ever-changing world of professional franchises.
KKR Set to Acquire Arctos Partners: Private Equity's Sports Play
Key Discussion Points
Arctos Acquisition: The Deal and Its Significance
- KKR—one of the world’s largest and oldest private equity firms—is acquiring Arctos Partners, a sports-focused PE firm, in a deal valued around $1B (04:13–05:26).
- This represents a major move from “edge” sports investments (media/gaming) into direct (minority) team ownership.
"Kkr, you know, one of the oldest private equity firms in the United States, really in the world, and kind of the granddaddy of the asset class, if you will...this Arctos deal...would really move them in a meaningful way into minority team ownership."
— Alison McNeely, 04:42
Why Arctos? Why Now?
- KKR was already in related fields (media, stadium financing, gaming, lending) but lacked deep exposure to direct team ownership (05:42).
- Alison McNeely notes team ownership is “a totally different ballgame...They're really kind of assessing the landscape,” looking for high-value, scalable bets (05:42–06:19).
Navigating League Rules and Potential Conflicts
- Sports leagues (NHL, NBA, NFL, etc.) tightly control who can invest in franchises—there's extensive vetting to avoid conflicts of interest (07:36–09:12).
- Leagues are reviewing the KKR/Arctos deal’s possible conflicts, e.g., “is there some athlete somewhere who's a pitch man for a KKR portfolio that they're not aware of?” (07:36).
What’s the Strategic Value?
- Arctos brings "boots on the ground"—instantly connecting KKR to multiple major leagues.
- This could give KKR an inside track as a “big, money giant” with “clearance in all the leagues” and turn it into a powerhouse across college and women's sports sectors too (09:54–11:24).
Barriers and Timeline
- The deal's completion depends on all leagues’ approvals—a process that could take months, given KKR’s vast, complex portfolio (08:52–09:16).
Changing Sports Ownership: The Big Picture
- KKR (and private equity) have access to vast, continuous capital—including new retail investment products.
- This raises questions about the potential imbalance between individual (e.g. Jerry Jones of the Cowboys) and institutional owners (12:01–13:22).
"They just have a ton of money coming in all the time that they can put to work in potentially in sports." — Alison McNeely, 13:01
Winners and Valuations
- Valuation pegged around $1B, plus "earnouts and incentives" for the retained Arctos senior team, based on future performance (13:47–14:09).
- The deal could further push money and institutional sophistication into underdeveloped sectors like women’s and college sports.
Robinhood's Push Into Prediction Markets
Key Insights and Industry Context
Why Prediction Markets Now?
- Robinhood began offering prediction markets in 2025, starting with the US presidential election, as part of its vision for a "financial super app" (17:53–18:45).
- JB McKenzie emphasizes the distinction between prediction markets and sports betting—predictions are traded on public, CFTC-regulated exchanges with no “house,” unlike classic sportsbooks (19:10–20:42).
"Prediction markets...use the identical structure as equity options in future markets...It's a centralized order book...unlike a sportsbook where the sportsbook sets the line." — J.B. McKenzie, 19:10
Transparency and Regulation
- Prediction markets operate via central order books, with transparent pricing and full collateralization—every participant sees the same price (19:10–20:42; 22:57).
- They are CFTC-regulated, with strict KYC and anti-money laundering (AML) compliance.
Risk Management and Product Design
- Robinhood only lists markets with sufficient liquidity and mainstream interest (22:57–24:30).
- Trades are fully collateralized; users can create complex “custom combos,” akin to parlays, starting with NFL playoffs (24:46–25:48).
AI, Tools, and the Future of User Engagement
- Robinhood's Cortex AI chatbot gives real-time info and alerts, hinting at the convergence of financial and sports analytics (25:48–27:54).
- “AI now is making it even more accessible so that you can then make great decisions...I think it's going to continue to play an important role when it comes into the sports world.”
— J.B. McKenzie, 27:37
Insider Information and KYC
- The danger of insider trading (especially in politics or economics, less so in sports) is managed through robust KYC, employment checks, and data verification (27:54–29:32).
Sports Business Predictions for 2026
Exploring Key Trends (33:34–44:15)
Institutional Capital and College Sports
- Ira Budway predicts that private equity’s anticipated flood into college sports will “stall out.” Initial deals (like Utah/Otro Capital, Big 12/Redbird & Weatherford) keep faltering at the approval stage (34:53–37:07).
- University leadership questions whether PE money is needed, especially when cheap bond financing is available.
"They bring it to the board of regents... that's where it stops...Are we losing governance? ...they keep reshaping these deals to try to get them over the finish line. And I think by the time you do that, they become maybe less attractive."
— Ira Budway, 36:08
Deal Structure and Foreign Investment Risks
- University-PE deals are often structured through holding companies that capture future media and sponsorship revenue—rarely direct equity.
- There's minimal regulation preventing foreign/institutional investment, but for private universities, essentially “they govern themselves” (37:26–39:19).
College Athlete Compensation
- Schools are now officially spending up to $20M annually on football player compensation, with star quarterbacks commanding up to $5M (41:57–42:29).
Major League Spending & Team Sales
- MLB increasingly rewards big spending (Dodgers, Yankees, Mets), as “money rules all”—expect more teams to emulate that (40:22–41:18).
- NFL team sales are forecast (Saints, Seahawks), with franchise valuations climbing rapidly, requiring leagues to “keep changing their rules to allow more institutional money in simply for the reason that it's hard to find people with cash sitting around" (43:56).
"The NFL, it's...They are distinct among all sports...audience size...the way they share revenue... these clubs, they don't lose money in the meantime. So you get an asset that's probably going to grow in value and while you're holding it, you're not bleeding money."
— Ira Budway, 43:13
Women's Sports
- Vanessa Perdomo calls attention to a “crisis” in women’s sports—success isn’t translating into adequate player compensation (34:11–46:00).
Memorable Quotes
-
On Sports Ownership Shifts:
“It has the potential as more and more of these huge money managers come into sports, it has the potential to fundamentally change the landscape. They are so deep pocketed.”
— Alison McNeely, 12:33 -
On Prediction Markets’ Edge:
“We’re removing the conflict...in this case, we look at you as saying you can buy and sell and come in and out of that trade whenever you want. It has no impact on our book.”
— J.B. McKenzie, 21:13 -
On Private Equity’s College Sports Roadblocks:
“Once the first deals get done, it’s going to be floodgates...but I think by the time these get done, they may not be as exciting for everyone involved as everyone has said.”
— Ira Budway, 34:57 -
On Women's Sports Urgency:
“Women's sports need to kind of pay their players.”
— Vanessa Perdomo, 34:11 -
On NFL Franchise Values and Access:
“The NFL...they may have to keep changing their rules to allow more institutional money in simply for the reason that it's hard to find people with cash sitting around.”
— Ira Budway, 43:58
Key Timestamps
- KKR-Arctos Deal Introduction & Analysis: 04:13–14:27
- Robinhood Prediction Markets Deep Dive: 17:24–29:32
- Sports Business Predictions Panel: 33:34–44:15
Tone & Style
Hosts and guests maintain a conversational, informed, and sometimes irreverent tone, mixing deep financial analysis with sports fan enthusiasm. The episode is rich with context for anyone interested in the financial shifts powering modern sports—from the locker room to Wall Street.
Recommended For:
Investors, industry insiders, sports business aficionados, and anyone fascinated by the merging worlds of finance, technology, and pro sports management.
Listen for:
How billion-dollar deals are literally changing the game at every level; why prediction markets could seriously disrupt sports betting; and the coming battle for control—and compensation—in both college and women’s sports.